SINGAPORE – Next month’s Budget is expected to target sectors hit hardest by the pandemic, but overall spending will be reined in after extensive support measures were rolled out last year.
Mr Liang Eng Hwa, chairman of the Government Parliamentary Committee for Finance, Trade and Industry, told a pre-Budget roundtable: “I’m a bit more realistic about what to expect for the upcoming Budget because there are only so (many) financial resources you can use to help.”
The Government set aside a $100 billion war chest to tackle the pandemic last year, with most of the funds used to support businesses and help workers keep their jobs.
“I expect this Budget to be a lot more targeted and differentiated than before, so we really channel and allocate funds to those businesses that need help, grow the economy and create jobs,” added Mr Liang at the Institute of Singapore Chartered Accountants roundtable on Thursday (Jan 14).
“We’ll still have to help, but the numbers will taper off along the way.”
Trade association and industry experts told the virtual event that more can be done to help businesses access existing grants as applications can be cumbersome.
Mr Ang Yuit, vice-president of the Association of Small and Medium Enterprises, said rental relief measures were a lifeline for firms but took a long time to reach small and medium-sized enterprises (SMEs).
“For many cases, as of today or yesterday, many SMEs are only now receiving the rebate that was supposed to be given last year. It takes a while (for the relief to reach SMEs) due to imbalanced relationship between them and the landlords,” noted Mr Ang.
Firms have also said they face a “laborious and bureaucratic” process to get support to reskill their workers, he said, adding: “We are concerned that with a slowness in getting that into effect, we’ll have people (who) have to be let go because their skills don’t match.”
However, less government assistance could actually be a good thing, noted Singapore Retailers Association executive director Rose Tong.
She said grants could distract companies from their business objectives as they tailor their goals to meet qualifying criteria. “This could stifle their authentic growth,” she said.
“Some retailers have also gotten addicted to grants and subsidies such that they may be unwilling to embark on a much-needed transformation initiative should there not be a grant available.”
Professor Sum Yee Loong, board member of the Singapore Chartered Tax Professionals, said the Jobs Support Scheme has kept many workers employed. “But now we need to ask ourselves, are we keeping alive firms that are prospering, or are we prolonging the death of inefficient companies?”
The Government should also consider bringing back some measures in the Productivity and Innovation Credit scheme – which expired in 2018 – to give employers more tax incentive to train workers, said Mr Low Hwee Chua, tax and legal regional managing partner at Deloitte Singapore and South-east Asia.
Mr Ajay Kumar Sanganeria, head of tax at KPMG Singapore, noted that there is a skills gap in the local workforce in deep tech areas such as artificial intelligence and the Internet of Things that foreign talent can help fill.
Foreign staff have to be hired in a calibrated manner to plug the talent gap in the local workforce, he added.
“In addition to working for the company that hires them, foreign talent should train the local workforce in digital skills by working with the companies, trade associations and chambers and government agencies,” he suggested.
Singapore’s workforce should also be encouraged to expand their horizons, added Mr Sanganeria. He said: “Today, employees here can work remotely for any global company without even moving out of Singapore.
“There should be support for the local workforce to look for job opportunities in foreign countries while working remotely. This will broaden their skills.”
Sign up for our daily updates here and get the latest news delivered to your inbox.
Get The Straits Times app and receive breaking news alerts and more. Download from the Apple App Store or Google Play Store now.
Source: Read Full Article